Although the Dallas office space market isn’t quite thundering ahead, it is making slow gains, and that’s very good news for the Dallas economy. Experts anticipate that 2012 will be a year of slow recovery for the Dallas office space market, as demand continues to grow and the supply remains small.
Business Relocation Up, Vacancy Goes Down
Although vacancy is still quite high, it is important to note that it, too, is, on a downward course. Rents continue to show small gains, and business relocation activity is starting to show good signs, as well. Some relocation firms are now acquiring new buildings, thereby showing experts that better times are on their way. But perhaps the best sign that the Dallas office space market is headed in the right direction is speculative construction. Although speculative construction is moving slowly and carefully, the signs of growth are there; we just need to be a little patient.
The Beginnings of Speculative Construction
Because speculative construction is occurring even as vacancy rates remain relatively high, many feel that this is a great sign for the market. Although growth rates in rent remain low, mainly due to the fact that there is still a relatively large volume of vacant space in the market, the overall market, according to many experts, has changed from being tenant-favorable to being rather neutral. Realty experts anticipate modest gains in the vacancy rate for the remainder of 2012.
Although there doesn’t appear to be any major reason to celebrate, the Dallas office space market has nonetheless seen the worst of the recession and is now on the road to recovery. Single property sales volume rose to $392 million for four major deals in the first quarter, which was double the dollar sum of 2011. It is important to also point out that this total was the best single-quarter total since the fourth quarter of 2006. In fact, the average selling price for the first quarter was $167 per square foot, compared to just $46 per square foot in 2011.
Where does the Dallas office market head from here? Provided everyone has the patience to wait it out, things appear as if they are only going to get better – albeit slowly.